Rand falters after Trump tests positive for coronavirus

The rand weakened early on Friday as United States President Donald Trump’s overnight announcement that he had tested positive for Covid-19 dampened risk demand.

At 0645 GMT the rand was 0.6% weaker at R16.70 per dollar from a close of R16.60 overnight, halting a recovery that has seen the unit gain around 4% this week.


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In a tweet, Trump said he and his wife Melania Trump had both tested positive and would begin quarantine immediately.

That set-off more volatility in currency markets already unnerved by the upcoming US presidential elections in November and fears of a second wave of coronavirus infections in the United States as well as Europe.

“The rand is trading defensively along with other higher-risk assets in thinned liquidity conditions due to market holidays in China and India,” said market economists at ETM Analytics in a note.

“Ahead of the non-farm payrolls data later this afternoon, momentum may well stall, but given the over-riding news of Trump’s illness, market sentiment will remain a constraint to riskier currencies including the ZAR.”

Bonds also weakened, with the yield on the benchmark 2030 government issue up 4.5 basis points to 9.45%.

Source: moneyweb.co.za